2024 (10) TMI 1768

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....t') levying penalty of Rs. 1,50,00,000/-. 2. The learned counsel for the petitioner contends that penalty under Section 271D of the Act, is levied without recording any satisfaction in the assessment order to the effect that the penalty under Section 271D of the Act, had been contemplated. 3. It is stated that a search and seizure operation was conducted under Section 132 of the Income-tax Act, the case of M/s Usha Bala Group and V.V. Balaksirshna Rao. During the search proceedings in the case of V.V. Balakrishna Rao, certain incriminating documents relating to the petitioner were found. Applying the provisions of Sec.153C of the Act, the petitioner was asked to submit his return of income. Pursuant thereto, the petitioner has furnish....

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.... In the said notice, it was observed that on cross verification of the details furnished by the petitioner and Balakrishna Rao, there are no discrepancies, however, the seized material contains document(s), which includes a letter dated 02-06-2014, stated to have been issued by the petitioner to Balakrishnarao, depicting the availing cash loan of Rs.6 crores, and pledging of immovable properties as collateral security by pointing out from the material before it the AO concluded that (pg.14 of assessment order) the petitioner had financial transaction with Balakrishna Rao, outside the books and outside banking channels for the subject assessment year. The relevant material was copied and pasted in the assessment order (Pgs.15 to 56) making t....

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....mitted by the petitioner and for appropriate action. The learned Joint Commissioner of Income-tax, has initiated the penalty proceedings under Section 271D of the Income Tax Act, and levied penalty of Rs. 6,65,00,000/-. Challenging the same, the instant Writ Petition is filed. 4. Heard, submissions of the learned counsel for the petitioner and the respondents. 5. Perused material on record. 6. The main contention of the petitioner is that no satisfaction was recorded in the assessment order with regard to levy of penalty under Section 271 D of the Act. The petitioner relying on the decision of the Apex Court in the case of CIT Vs. JaiLaxmi Rice Mills, Ambala City (2015)64 Taxmann.com75(SC), contends that there was no evidence befor....

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.....B. Shanthi, (2002) 255 ITR 258 (SC) VII. In the case of Ashok Kumar Vs. State of Haryana, (2010) 12 SCC 350 VIII. In the case of Dilip N. Shroff Vs. CIT, (2007) 6 SCC 329 8. We have gone through the material placed on record. The Assessing Officer, except to base his addition on the letter of the assessee dated 02-06-2014, did not record any finding that there has been any violation of the provisions of Sec. 269SS of the Act by the assessee, nor was any satisfaction recorded to the effect that the alleged transaction of acceptance of loan in cash would attract penal consequences. In the absence of any finding to the said effect, in our considered view, the penalty cannot be levied. A presumption can be drawn from the a....